DataWorks’ Cash Flow Target Hinges on Contract Milestones and Strategic Review

Strong Contract Renewals and Operational Discipline

DataWorks Group Limited (ASX: DWG) has reported a solid quarter ending March 2025, marked by a significant two-year extension of its BetStop self-exclusion contract with the Australian Communications and Media Authority (ACMA). This extension through to June 2027 underscores the market’s confidence in DataWorks’ technology and operational reliability, reinforcing its position as a global leader in RegTech solutions for gambling harm minimisation.

During the quarter, the company recorded cash receipts of $1.3 million and an operating cash outflow of $1.45 million, aligning with management’s expectations. Notably, administration and corporate costs were reduced by close to 25% quarter-on-quarter, reflecting permanent cost-cutting initiatives that bolster the company’s path to profitability.

Progress on Canadian Front and Sales Pipeline Expansion

DataWorks continues to advance its iGO Ontario contract in Canada, with the solution build phase progressing steadily and key project milestones being met on schedule. Alpha trials with iGaming operators are underway, with beta trials imminent, positioning the company well for a late 2025 go-live. Discussions with iGO about additional solutions beyond the current scope signal potential for further contract expansion.

On the sales front, DataWorks has formally submitted a proposal for a major domestic land-based centralised self-exclusion contract, with a decision expected in the first half of calendar 2025. Internationally, the company is actively engaged in multiple advanced sales opportunities, including in Alberta, Canada, where evolving iGaming legislation could unlock new contracts. This pipeline development is critical to enhancing the company’s financial outlook beyond the current contracted revenue base.

Financial Health and Strategic Focus

As of the quarter’s end, DataWorks held $1.4 million in cash and cash equivalents, sufficient to support its operations as it targets positive operating cash flow by December 2025. The company anticipates a substantial increase in cash inflows from existing contracts, particularly from the iGO Ontario project, which will help reduce operating cash burn starting in the June quarter.

Meanwhile, the datapowa division experienced a 35% revenue decline due to contract delays and ongoing negotiations. Reflecting a strategic pivot, DataWorks is reviewing options for datapowa, including potential divestment, to concentrate resources on its RegTech business, which management views as the core driver of long-term growth and shareholder value.

Outlook and Market Positioning

DataWorks’ renewed focus on RegTech aligns with the global trend of increasing regulatory scrutiny and demand for player protection technologies in the iGaming sector. The company’s proprietary technology, including the BetStop platform and Secure Data Engine, continues to deliver strong performance metrics, such as over 40,000 enrolments and 25 billion verification checks with 100% uptime.

With a leaner cost structure and a robust sales pipeline, DataWorks is well positioned to capitalize on the expanding global RegTech market. The company is also actively evaluating merger and acquisition opportunities to strengthen its market position, although no deals have yet reached an advanced stage.